Gender Diversity: Do Targets or Quotas Work?

We once thought it was a “matter of time” before women would work their way up and be proportionately represented at upper levels of businesses and professions. Decades have passed, and people like Rachel Feintzeig agree that it is a “slow march toward gender equality in the upper ranks of companies.” According tothe recent study by McKinsey & Co. and LeanIn.Org, at the current pace, it will take 25 years to reach gender parity at the senior vice president level.

Some companies, reports Feintzeig, are finding that setting goals helps. And some create accountability for reaching goals by tying them to pay. In her WSJ piece, “More Firms Say Targets Are the Key to Gender Diversity,” she names J&J, Intel Corp., BASF, Twitter and Pinterest. She reports that firms that set targets have made more progress in seeing women join men at the top.

The upside of setting targets is simple. What gets measured is more likely to get done. Setting targets signals that gender diversity is important and is to be treated as a business objective. And it keeps managers focused on changing attitudes and behaviors. It can break through what I call the “comfort principle” – which BASF’s Chief Diversity Officer calls the natural tendency “for people to sometimes want to hire themselves.”

There are downsides to tying pay to reaching set numbers or percentages of women – e.g., in the hiring pool, number interviewed, or number hired, promoted or given visible assignments. It can incent the wrong behaviors and choices. It enables men to charge reverse discrimination. It can invite cynicism and backlash. (I personally experienced this when a subordinate told me that I had reached the C-level because I was a woman – while I thought it was despite my gender.)

In Europe quotas for women board members have become the norm. The U.S. resists that solution. And I find them troublesome, primarily because of the downsides of targets. But could it help accelerate that “slow march”?

If targets can help companies reap the documented rewards of gender diversity in leadership, what should they be? Any target must be realistic (i.e., achievable). The report by McKinsey and LeanIn.Org concludes that it will take “more than a century until 50% of C-suite executives are female.” The goal of 50% seems unrealistic to me – in 100 years or ever. When we look at all the reasons women don’t reach the C-level, many are fixable (and need fixing). For example, we need to make it easier and more acceptable to balance career and family, assure women get career development, mentors and sponsors, and create workplace cultures where women feel heard and valued.

But even if all of these factors were fixed (my mission), we may still find fewer women than men at the top. If that is because fewer women want the life that goes with being at the top, I am fine with that. What I’m not fine with is having capable and deserving women stall out, give up or exhaust themselves trying to navigate those fixable factors.

What do you think of targets? How about quotas? How do we get the upsides and avoid the down?